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Breakfast Cereals - UK

Published by: Mintel International Group Ltd.

Published: Feb. 1, 2008 - 115 Pages


Table of Contents


Issues in the Market

Definitions

Four key issues

Market in Brief

Consumers are trading up

Breakfast is back

RTE cereals jump on the oat bandwagon

Cereal success

Prices are set to rise

Premiumisation to continue

Internal Market Environment

Key points

The health revolution

Figure 1: Agreement with selected lifestyle statements, 2003-07

Health is the key driving force of sales and NPD

Skipping breakfast

The way to start the day

Figure 2: Agreement with selected lifestyle statements, 2003-07

Broader Market Environment

Key points

FSA nutrient profiling and Ofcom Advertising Ban

Cereal prices

An ageing population

Figure 3: UK population changes, by age and socio-economic status, 2002-12

Going upmarket

Competitive Context

Key points

Toast and fruit are the key competitors

Figure 4: Product eaten at breakfast and frequency, December 2006

Figure 5: Product eaten at breakfast and frequency, December 2006

Bread

Yo‘go’urt

Fruit on top

Cereal bars are growing

Figure 6: Opportunities and threats in the competing markets, 2002-06

Strengths and Weaknesses in the Market

Strengths

Weaknesses

Market Value and Forecast

Key points

Consumers are trading up

Figure 8: UK retail sales of breakfast cereals, 2002-07

The future

Rising cereal prices

Increasing frequency of usage will be key

Forecast

Healthy growth set to continue

Figure 9: UK retail sales of breakfast cereals, 2002-12

Health to remain a crucial market driver

Demographic changes to promote growth

Figure 10: UK retail volume and value sales of RTE cereal, 2002-12

Figure 11: UK retail volume and value sales of hot cereal, 2002-12

Higher growth potential for hot cereals

Rising cereal prices

Factors used in the forecast

Segment Performance

Key points

The kings of breakfast cereals

Figure 12: UK retail volume and value sales of RTE cereal, 2002-07

Easy to eat the perfect proposition

A stable staple

Shape of the market

Figure 13: Value share of sub-sections of the RTE breakfast cereal market, 2007

I’ll have my favourite

Doing it for the kids

From reducing to naturally good

The oat effect drives naturally healthy

Minor organic

Cold oat-base cereals have stolen hot cereals’ thunder

Figure 14: UK retail volume and value sales of hot cereal, 2002-07

Own-label repercussions

Hot instant cereals are growing

Figure 15: UK retail volume sales of hot cereal, by type, 2003-07

Market Share

Key points

Branded successful

Very special K

Figure 16: The top-selling breakfast cereals in the UK, by estimated brand shares, 2006-07

The health effect

No compromise on favourites

Oatso successful

Product Positioning

The reign of traditional brands

Figure 17: Price per Kilo of RTE Brands from Selected Supermarkets, January 2008

The deflationary effect of own label

Figure 18: Price per Kilo of Hot-Cereal Brands from Selected Supermarkets, January 2008

Companies and Products

Brand map of manufacturers and brands

Figure 19: Map of manufacturers and brands in the breakfast cereals market, 2008

Company profiles

Kellogg’s UK

Figure 20: Key developments in the Kelloggs portfolio, 2007

Cereal Partners UK (Nestlé)

The Weetabix Food Company

Quaker Oats Ltd

W. Jordans Ltd

Dorset Cereals Ltd

Mornflake Oats

Kallo Foods Ltd

Doves Farm Foods

Weight Watchers

Honey Monster Foods

Brand Communication and Promotion

Key points

Spending spree

Figure 36: Main monitored media spend on cereals, 2003-07*

Figure 37: Main monitored media spend, on cereals ready to eat and cereal requiring preparation, 2003-07*

Seasonality

Figure 38: Monthly main monitored media spend on breakfast cereals, 2005-07

The mighty Kellogg’s

Figure 39: Main monitored media spend, by advertiser, 2003-07

Nominal spend

Cereals requiring preparation

Channels to Market

Key points

Figure 40: UK retail distribution of breakfast cereal, 2003-07

Multiple strengths

Acting independently

Multiple convenience

Consumer 1 - Who - Usage and Frequency?

Key points

Cold breakfast cereals are a key part of the breakfast ritual

Consumption of cold breakfast cereals

Figure 41: Consumption of cold breakfast cereals in the last 12 months, 2003-07

Feeding the masses

Figure 42: Consumption of cold breakfast cereals in the last 12 months, by gender, age and socio-economic status, 2003-07

Retired and ABs have daily breakfast

Hot breakfast cereals growing as manufacturers talk up the game

Figure 43: Consumption of hot breakfast cereals in the last 12 months, 2003-07

Figure 44: Consumption of hot breakfast cereals in the last 12 months, by gender, age and socio-economic status, 2003-07

Consumers eat both hot and cold cereals

Cereal bars are a different competitive set

Figure 45: Consumption of cereal bars, cold breakfast cereals and hot breakfast cereals in the last 12 months, 2003-07

Cereal has a firm hold on the youth market

Figure 46: 7-14-year-olds who eat cereal, 2003-07

13-14-year-olds: the key target group

Figure 47: 7-14-year-olds who eat cereal, by demographic sub group, 2007

Consumer 2 - Usage Occasions

Key points

When do consumers eat cereals?

Figure 48: Occasions when you eat cereals, November 2007

Week usage dominates

Snacking popular tabloid readers

New product packaging will help differentiate product

Appendix

Advertising data

Abbreviations

Appendix - Internal Market Environment

Number of times a week people eat breakfast

Figure 53: Number of times consumers eat breakast per week, January 2007

Figure 54: Agreement with selected lifestyle statements, by demographic sub group, 2007

Figure 55: Agreement with selected lifestyle statements, by demographic sub group, 2007

Figure 56: Agreement with selected lifestyle statements, by demographic sub group, 2007

Figure 57: Agreement with selected lifestyle statements, by demographic sub group, 2007

Figure 58: Agreement with selected lifestyle statements, by demographic sub group, 2007

Figure 59: Agreement with selected lifestyle statements, 2003-07

Appendix - Market Sizes

Figure 60: UK retail volume and value sales of breakfast cereal, by type, 2003-07

Segment performance

Appendix - Brand Communication and Promotion

Figure 61: Main monitored media spend by advertiser, 2003 - 07

Figure 62: Main monitored media spend, by advertiser, 2003 - 07

Appendix - Consumer 1 - Detailed Demographics

Figure 63: Consumption of hot breakfast cereals in the last 12 months, by demographic sub group, 2007

Figure 64: Consumption of cold breakfast cereals in the last 12 months, by demographic sub group, 2007

Appendix - Youth TGI

Figure 65: Agreement with selected lifestyle statements on food, 7-10s, 2003-07

Figure 66: Agreement with selected lifestyle statements on food, 11-14s, 2003-07

Figure 67: Agreement with selected lifestyle statements on food, 7-10s, by gender, age, socio-economic group and region, 2007

Figure 68: Agreement with selected lifestyle statements on food, 11-14s, by gender, age, socio-economic group and region, 2007

Appendix - Meal Occasions

Figure 69: Meal occasions for eating breakfast cereal, November 2007

Figure 70: Meal occasions for eating breakfast cereal, November 2007

Appendix - Factors Looked for When Choosing a Cereal

Figure 71: Factors looked for when choosing a cereal, November 2007

Figure 72: Factors looked for when selecting a cereal, November 2007

Figure 73: Factors looked for when selecting a cereal, November 2007

Abstract

The breakfast cereal market is worth an estimated £1.28 billion and, considering its high household penetration, has shown strong growth over the last five years, increasing in size by 17%. The cereal market has been on the front foot of the health revolution making the most of its natural goodness and the importance of breakfast, as well as actively limiting added salt and sugar.

However, high penetration and frequency of usage make further growth difficult. In the future, breakfast cereals will need to deliver more in terms of health benefits, provenance and green issue awareness, if they are to increase consumer engagement. Increasing frequency of consumption will be crucial to driving growth, and new and diverse eating occasions will need to be secured against a backdrop of rising raw ingredient prices.

Four key issues
  • Health as the key driver
  • Impact of ready to eat cold oat-based cereals
  • Big brands and big media budgets
  • Raising frequency of usage.


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